Developig a savings culture is one of the most critical things every dreamer or visionary must learn. Savings means the part of your income or earnings that you dedicate to be kept away untouched for a period of time. Savings should not be compared with investment as they are ultimately two different things. While investment is good, savings is also a way to have some money or finances to fall back on when the need arises.
Investment poses some sort of risk because no one has a total control over the market. The market doesn't care about anyone or who you are or where you are from and that's why it's important to dedicate some money to savings too.
Besides investment, it is also imperative to develop multiple source of income because as you grow and make certain decisions in life such as marriage and bearing of children your expenses increases. While marriage and children bring some sort of happiness and sometimes can be considered as success, it puts a strain on your earnings hence the importance of having a multiple source of income.
It is important that we separate the difference and understand why savings is good. Sometimes big business opportunities are taken because of savings. Sometimes too, most of us won't achieve landmark things if we do not have savings or take loans. While loans have its shortcomings, using your savings for a project can give you some rest of mind and a clear perspective over your business perspective.
How do you develop this culture?
A savings culture as the word implies is actually a culture. It is learn or socially acquired as the case may be. Sometimes it's learnt through parents who at early stage inculcate this education into their children and its sometimes learnt through mediums like this. Some people equally just found themselves developing that culture because of its inevitability.
Now there are different practical ways you can achieve this:
1. Using the pensions facility as savings.
Perhaps you don't know too and for those who are on pension, you can also authorize your pension manager to save some certain amount of your earnings till when you are retired or due for pension. You can meet with your pension manager for clarification.
2. Authorizing your bank to debit a certain amount each month.
You can authorize your bank to save a certain amount of your income to be collected at a particular time or period.
3. Using the traditional old method of a trusted confidant.
Sometimes you can keep money with your family if they are very trusted.
4. Using the strength of your partner if s/ he has a savings mindset.
Sometimes married folks can use their spouses savings strength if one of them knows how to keep money and if there is an agreement on the period the savings would last for.
5. Cutting down frivolities.
Cutting down the amount of clubbing you do in a month or the number of beers you drink daily. You could think you have the cash now but savings is what would save you when all chips are down.
6. Reducing liabilities.
Reducing liabilities involves doing away with things that take cash from you but are really unimportant. Think about it and you would realize those things you spend money on that are really not needed. You own three cars but you actually only need a good one.
7. Regenerating your mindset.
This means doubling your effort in a bid to achieve this important lesson. It would be tough and it's definitely not easy but it is doable and possible.
Understanding the power of money is important to improving your purchasing power. If you keep spending on unimportant things you won't go far in life and if you spend money on vain things money won't last in your hands because money needs to be continuously doubled or generated in other to stay in the game of money. This is evident in testimonies of rich folks who have become poor.
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